Rokit ready to roll in UK, but does it have the fuel for a fast start?

0
1869

Vendor will differentiate with features like glasses-free 3D and insurance, but these may be a hard sell

Smartphone vendor Rokit is looking to race into the UK smartphone market after announcing a title sponsorship deal with British Formula One motor racing institution Williams Racing.

Alongside this, Rokit is set to enter the UK handset market in March with the world’s first glasses-free 3D smartphones, which will come with assault, funeral and vehicle breakdown insurance.

Under the multi-year deal for an undisclosed fee, the F1 team will now be known as Rokit Williams Racing.

This means Rokit’s name will now appear alongside those of other big advertisers in races, such as energy conglomerates Shell (Ferrari) and Petronas (Mercedes). The latter, which is current home of reigning F1 champion Lewis Hamilton, was reportedly splashing out £32.8 million annually on its title sponsorship before its new deal in 2017.

Rokit no doubt spent some serious money for its title sponsorship, despite Williams coming last in the F1 2018 Constructor standings, with the aim of elevating its start-up status in what is a saturated smartphone market. The UK has seen a slew of new players from the Far East arrive in the past two years, equipped with deep wallets and incredible smartphone R&D.

The company began life quietly last August, naming former Kazam and Wileyfox boss Michael Coombes as CEO. It is part of the Rok Group umbrella, which includes a host of companies in sectors such as beverages and marketing, as well as a wireless operator called Rok Mobile in the US.

Rok Mobile was founded in 2014 and at the time provided half of its current proposition. It sold SIM-only plans coupled with Rok Group’s insurance proposition in the US. The group’s founders, John Paul DeJoria and Jonathan Kendrick (see boxout bottom of P29), labelled the offering “compassionate capitalism”, with healthcare available with US devices.


Mountain to climb

Rokit seems to have deep pockets for a fight in the smartphone arena, but like Williams, it has a large mountain to climb from the very bottom this year.

IDC senior research analyst Marta Pinto has doubts about the vendor’s chances of success in the UK because its unique selling points may prove too niche.

She believes, for example, that insurance won’t sell a large number of phones. “Buying a smartphone and getting life insurance: I’m not sure whether that’s a good sales pitch,” she says. “I don’t think people will be subscribing for a long time for the insurance.”

Pinto thinks Rokit needs to add more mobile-related services. “Look at Apple – it gives you access to iCloud and Apple Music,” she points out. “Rokit needs to diversify its offerings. Going forward, the business model will probably shift more towards device-as-a service [DaaS] for Rokit.”

GfK key account director for technology Imran Choudhary praises the proposition as unique, however, saying it could pave the way for a similar offering from another player.

“The fact the brand has launched with a 3D screen gives it a talking point which will help raise brand awareness,” he says.

He also cites the insurance aspect, saying: “What truly is quite unique about its proposition is the element of providing life services such as breakdown cover and insurance along with the handset.

“Whilst historically there hasn’t been demand for these services in conjunction with your mobile device or service provider, it’s a novel approach and an innovation that may well carve out a niche and give more well established brands in the market something to think about; so don’t be surprised if you see something similar crop up elsewhere further down the line.”

Added to this, Choudhary points out that Rokit’s new range is at the value end of the market, meaning consumers will not be put off by high device acquisition costs.


Glasses-free 3D

To support Rokit’s 3D proposition, Coombes revealed to Mobile News that the firm has struck deals with film studios to have a range of 3D movies come out this year. He also says Rokit will internally develop 3D games.

“Every time a film comes out in cinema, they release a 2D and 3D version,” he says. “The 2D version lives on and is shown in other mediums, whereas the 3D version is locked away. We’re going to have a lot of licensed content, we’ve signed some big film studios for content and we’re going to announce later. We also have our own studio and we’re going to make some platformer and fighting games.”

However, 3D technology has often been viewed as a failure in the TV market: LG and Sony became the last players to drop the technology in 2017, with none of their new high-end TV sets capable of showing 3D movies and TV shows.

Nevertheless, Japanese video games developer Nintendo has attained some success with 3D. The company’s portable Nintendo 3DS games console, which also has a glasses-free version of the technology, shipped 74.84 million units between 2011 and 2018.

And Coombes believes the glasses-free approach could make Rokit a home for 3D mobile video. “3D technology was quickly dumped in TVs because of the need for glasses,” he says. “There’s absolutely no way we would have put 3D with glasses on top for our phones.”

Pinto does not, however, think that the 3D play will strike a chord with consumers, saying: “Rokit will have a point of differentiation with 3D. But not even 4K devices have video content available. I’m not sure if Rokit will be successful, because if you bring something to the market, you have to show the user what’s different about your smartphone and how they can use it differently. If you don’t have any content, how will you show how different your product is?”

Pinto points to an example: “Look at Sony – it has Sony Pictures Entertainment and Sony Mobile does not sell a lot of phones. It’s a brand that’s very well-known in the market and has differentiating content, yet it still can’t make any money from bringing 4K films to smartphones.”

She also questions the availability of content for a new brand without a prior narrative that wants to bring out 3D films.

“I’m not sure how they can be successful in such a competitive market,” adds Pinto.

Choudhary believes, however, that the 3D technology and its F1 affiliation could bring some unique engagement with consumers, saying: “Its sponsorship certainly will give it a large global audience who overnight will become aware of the brand once the F1 season gets under way.

“Furthermore, it gives them a chance to promote viewing the sport on their 3D screen which allows them to bring the discussion back to their offering.”

Choudary adds: “Given that the 3D screen is glasses-free, there could be plenty of appetite from consumers to get their hands on the device and try the 3D aspect for themselves. This can lead to stronger engagement with the brand.”

However, Pinto  believes an F1 sponsorship is a bit too narrow to penetrate the UK consciousness compared with something like football. She says: “Brand awareness is important, but it seems they’re going for a niche. Motor sports are not for everyone and you’re not addressing the masses.”


Carving a niche

In entering the UK, Rokit will join one of the most competitive landscapes in the world – and one that has become even more crowded with the recent arrival of two prominent players from China, Xiaomi and Oppo. These two prop up the top five vendors list worldwide, in fourth and fifth respectively.

Coombes says, however, that Rokit is going after a different demographic and believes it will manage to carve out a niche.

“I think we’re aiming at different customers,” he says. “We have some unique features those new players can’t compete with. Yes, they’re in the same price bracket, but they’re not playing in the 3D or bundles game, and the way they promote their brands is different from ours.”

Rokit sales director Stuart Furnival (main pic far right) adds: “There are 31 million vehicles and 44 million people that qualify for personal accident insurance, and 25 million people who change mobile phones a year. There’s opportunity in the UK to be successful.”

Choudhary says: “With so many other challenger brands out there in the market, Rokit has been shrewd in focusing on the value end of the market and is banking on services elements which cover additional elements like vehicle breakdown and personal accident insurance to set them apart.”

Pinto, however, harbours concerns about the prospects for a new brand coming into the market without a prior buzz. “Because devices are super-expensive nowadays, there isn’t much space to play in the UK, because more than 80 to 85 per cent of shipments are concentrated on three brands,” she says.

NO COMMENTS

LEAVE A REPLY